Fate of 2 South Bay Hospitals to Be Decided - NBC Bay Area
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Fate of 2 South Bay Hospitals to Be Decided

California attorney general plans hearings on sale of financially troubled chain

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    The future of two prominent South Bay hospitals could soon be decided as the California attorney general holds the first public hearings on the possible sale of a hospital chain this week. Robert Handa reports. (Published Monday, Oct. 12, 2015)

    The future of two prominent South Bay hospitals could soon be decided as the California attorney general holds the first public hearings on the possible sale of a hospital chain this week.

    O'Connor Hospital in San Jose and Saint Louise Hospital in Gilroy are part of the financially troubled Daughters of Charity network. A highly publicized sale to Prime fell through last year and now the California attorney general plans to hold hearings on a new deal.

    The new proposal has workers and community members eager and worried. There are a lot of issues, and concerns, as public hearings begin on the future of the hospital chain. For one thing, community leaders say hospitals like Saint Louise provide a safety net for many people. They want to make sure that kind of compassion doesn't get lost.

    Workers who NBC Bay Area spoke with at the two hospitals said they are treating the public hearings on a possible sale as "good news,” since the hospital chain owner is losing about $150 million a year and possibly headed toward bankruptcy.

    A hedge fund, Blue Mountain, has made essentially a 15-year, $250 million offer for six hospitals with an option to convert them from a non-profit to profit operation after three years.

    The community group Working Partnerships says it plans to make sure the safety net of a nonprofit is protected if the operation becomes for profit. The group says it will ask the attorney general to place conditions on the deal that will continue for at least five years after the transition, including requiring some local control.

    The public hearings are scheduled for Thursday at 9 a.m. at at O’Connor Hospital and Gilroy City Hall at 2 p.m.

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